KUALA LUMPUR, 27 AUGUST 2024 – Malaysia Petroleum Resources Corporation (MPRC) is targeting 1,235 OGSE companies to report their sustainability practices by 2030 as part of its efforts to accelerate the OGSE sector’s journey in the energy transition.

Its National OGSE Sustainability Roadmap (NOS-R) launched today set a target for 236, or 75%, of mid-tier OGSE companies¹ and 973, or 50%, of OGSE SMEs² to start sustainability reporting by 2030, with all 26 OGSE PLCs to continue sustainability reporting as per Bursa Malaysia listing requirements. The targets and number of companies are based on the population of 2,286 companies operating core OGSE businesses identified in OGSE100 FY2022³.

Mohd Yazid Ja’afar, MPRC President/Chief Executive Officer, said, “The growing emphasis on sustainability has driven the oil, gas & energy industries to pivot to the energy transition to lower emissions. Furthermore, new regulations, standards, and frameworks on sustainability demonstrate heightened expectations from stakeholders for more transparent and accurate sustainability data to make informed decisions”.

The NOS-R is the second of MPRC’s trilogy of OGSE sustainability documents from its National OGSE Sustainability Programme which is an extension of the National OGSE Industry Blueprint 2021-2030 that identified sustainability as one of four key thrusts. The NOS- R identified four key factors that will drive the adoption of sustainable practices and reporting in the OGSE sector, namely; clients’ expectations and demands; requirements by investors and lenders; regulators and policies; as well as capturing opportunities.

Hence, this OGSE sustainability programme is essential to meet growing stakeholder pressure across the value chain for adopting sustainable practices. As ESG standards take priority, OGSE companies must adapt to ensure long-term viability and resilience, and this programme addresses these challenges by providing the tools and frameworks needed to help companies align with sustainability goals and thrive in the evolving landscape.

To address the drivers, NOS-R identified 12 key projects under four strategic initiatives. The four strategic initiatives; Accelerate Low Carbon Supply Operation and Supply Chain, Support Climate Risk Management, Strengthen Sustainability Practices, and Foster Talent Pool and Communication will be spearheaded by MPRC alongside the initiatives’ key stakeholders: Petroliam Nasional Berhad (PETRONAS), Petroleum Sarawak Berhad (PETROS), Malaysian Green Technology and Climate Change Corporation (MGTC) and Malaysian Oil, Gas & Energy Services Council (MOGSC). Additionally, NOS-R outlines five key enablers driving the sector's transformation to realise its goals.

The NOS-R is also aligned with national low-carbon aspirations: net-zero GHG emissions by 2050, reducing carbon intensity by 45% against GDP by 2040, and significantly cutting GHG emissions by 2050 as outlined in the Ekonomi Madani Framework, the Mid-Term Review of the 12th Malaysia Plan and National Energy Transition Roadmap, among other policy documents.

In developing the NOS-R, MPRC surveyed 123 OGSE companies and found that 45% of companies plan to begin sustainability reporting within the next 12 months, while 85% of non- PLCs and SMEs have yet to report sustainability practices and are considering publishing their sustainability report. Among the survey respondents, 15% were listed in the OGSE100, with over 60% being SMEs. These findings highlight a growing recognition within the OGSE sector of the need to communicate sustainability performance to external stakeholders.

The key challenges to sustainability reporting identified include a lack of clarity around sustainability standards, indicators, and required data, financial constraints, and a shortage of skilled sustainability talent. However, several opportunities have emerged including access to funding, equipping employees with knowledge and skills to respond to changing regulatory requirements and stakeholders’ expectations, and upgrading technology to adapt to a changing market.

Mohd Yazid concluded, “I strongly encourage companies in the OGSE sector to adopt this Roadmap as they map out their sustainability strategies for long-term success. The National OGSE Sustainability Framework Guide (NOS-F Guide), which will be launched in October 2024, will serve as a comprehensive resource to help firms implement NOS-R and evaluate their sustainability efforts”.

The full NOS-R publication is available at https://mprc.gov.my/wp-content/uploads/2024/08/MPRC_NOS-R.pdf.

________________________________________

¹ Companies reporting more than RM20 million in revenue for two consecutive years

² Companies reporting up to RM20 million in revenue

³ OGSE100 in MPRC’s flagship annual publication which analyses the size of Malaysia’s OGSE sector and ranks its top 100 companies by revenue

- END -

About MPRC

Established in April 2011, Malaysia Petroleum Resources Corporation (MPRC) is an agency of the Ministry of Economy primarily tasked with advancing Malaysia’s Oil and Gas Services and Equipment (OGSE) sector. As countries around the world, including Malaysia, embark on the energy transition, MPRC further advocates for OGSE companies to pivot towards cleaner and sustainable energy as new areas for business growth. MPRC also provides policy recommendations to the Government on the oil & gas and energy industries.

Following the launch of the National OGSE Industry Blueprint 2021-2030 (OGSE Blueprint), MPRC serves as its custodian, coordinating and implementing its initiatives together with OGSE Blueprint partners. The OGSE Blueprint seeks to develop a robust, resilient, and globally competitive OGSE sector that contributes to sustainable national development in Malaysia.

APPENDIX

About the National OGSE Sustainability Programme

Building on the foundation laid by the National OGSE Industry Blueprint 2021-2030, which positions sustainability as one of its key thrusts, MPRC is advancing the sector’s commitment to sustainable practices in line with the energy transition.

In 2022, MPRC launched the National OGSE Sustainability Programme consisting of a trilogy of documents to guide OGSE companies towards incorporating and reporting on sustainability practices. Firstly, it introduced the National OGSE Sustainability Plans (NOS-P), which proposed 11 recommendations to support OGSE companies in their journey into sustainability. The NOS-R makes up the second part of the programme and identifies the specific projects needed to spur the OGSE sector toward adopting sustainable practices. Moving forward, the NOS-F Guide will provide tailored guidance to help companies implement and report on sustainability.

Four Strategic Initiatives and 12 Projects that will advance sustainability among the OGSE companies:

Find out more about the OGSE Sustainability Programme at www.soonsenge174.sg-host.com/sustainability/.